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Intel Expands Portfolio With Xeon CPUs, FPGAs & AI-Chip

Zacks Equity Research

Intel INTC recently announced the availability of the new data-centric solutions portfolio. The product family comprises of the much awaited 2nd-Generation Xeon Scalable processors, Intel Optane DC memory and storage solutions, and software and platform technologies featuring robust artificial intelligence (“AI”) and memory capabilities.

Intel also augmented processors portfolio by introducing the all new Intel Xeon Platinum 9200 processor featuring 56-core and 12 memory channels.

Integrated with Intel Deep Learning Boost, the latest Intel Xeon Scalable processors are the industry’s most powerful FPGAs incorporated with high bandwidth memory to accelerate workloads and keep pace with data explosion. This will provide users more memory bandwidth compared with standalone DDR memory solutions.

Furthermore, these series of processors feature support to the company’s Optane DC persistent memory and instruction set of DL Boost to facilitate AI-based deep learning (“DL”) inference.

The company also showcased Intel Agile FPGAs, a new 10nm Intel FPGA, to secure servers in data centers which lack the hardware architecture.

The product family caters to high bandwidth memory interface required for next generation training in deep learning, HPC and offers IP to manage application workloads.

The newly added product will expand the onboard memory pool and add more bandwidth. We believe that the launch will improve scalability, reliability, power and density requirements of future HPC deployments.

We anticipate the new product launches will boost Intel’s footprint in the market amid rising competition from Advanced Micro Devices AMD, NVIDIA NVDA and Qualcomm QCOM.

The company has also gained 8.7% in the past one year, against the industry’s decline of 1.4%.

Abundant Market Prospects

The robust adoption of Xeon Scalable processors is anticipated to bolster the company’s CCG revenues in the quarters ahead. In the last reported quarter, Client Computing Group or CCG (52.6% of revenues) recorded a 9.7% on a year-over-year basisto reach $9.822 billion.

Intel’s push into emerging 5G infrastructure market also favors the company’s growth prospects. Notably, per ResearchAndMarkets data, global 5G market is projected to reach $251 billion by 2025 at a CAGR of around 97% from 2020.

Intel’s all round attempt to explore the entirety of emerging technology market with new announcements is expected reinforce investors’ optimism in the stock.

To Conclude

The customers are increasingly handling workloads either over the cloud, Internet of Things (“IoT”), 4G/5G wireless networks, among other emerging platforms. This calls for designing power constrained and high-performance applications solutions which customized ASICs offer.

Moreover, robust adoption of FPGAs is facilitating the migration to structured ASICs. Considering the rapid shift to structured ASICs, the company also targets to offer a cost-effective solution that automates the conversion process.

Programmable Solutions Group or PSG accounted for 3.3% of total revenues in fourth quarter. The segment reported growth of 7.7% from the year-ago quarter to reach $612million. Strength in data center and embedded products drove top-line growth.

We believe that growing demand for server chips that are utilized in the data centers from the cloud-based service providers like Amazon.com, Alphabet and Microsoft is a key catalyst for Intel.

Currently, Intel carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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